Credit Still Important for Mortgage Loans
Monday, February 9th, 2009In a recent article, the chief economist for LendingTree, Cameron Findlay stated that borrowers need to have a few borrowing qualifications met to get the lowest mortgage rates. First, you’ll need a FICO credit score of 720 or higher, a loan-comparison website.
To avoid surprises, you should obtain your credit score before you apply for a mortgage loan, says Nancy Flint-Budde, a financial planner in Salem, N.Y. Your credit score is based on information in the credit reports compiled by the three main credit bureaus: TransUnion, Equifax and Experian. You can order a free copy of all three of your credit reports once a year at www.annualcreditreport.com. You’ll have to pay extra for your credit score.
Once you have received your credit reports, check them for errors that could hurt your score. If your reports show late payments make sure the info is accurately reported. The only way to repair the damage is by showing mortgage lenders that you can prove it was a mistake or “you must have change your ways”, says Craig Watts, spokesman for Fair Isaac, who developed the FICO score. That will take time, because you need to demonstrate a pattern of on-time payments. However, if your credit reports show large credit card balances, you can raise your score quickly by paying them off, Watts says. Your “credit utilization” ratio, which reflects to the amount you’ve borrowed as a percentage of your available credit, accounts for 30% of your credit score. Credit repair solutions are available if you need help getting errors and duplicates removed from your credit report. Read the complete story by Reporter Sandra Block>
